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Tag: 2021 News

Demands for “Hero Pay” Rapidly Increasing Across Sectors

Grocery employees in dozens of cities from San Francisco to Santa Ana have successfully lobbied their council members to pass ordinances requiring employers to temporarily give hazard or “hero” pay, typically $3 to $5 an hour. Both proponents and opponents of the hazard pay movement expect more cities to adopt the policy. Similar ordinances may soon come up to a vote in cities from Fresno to Pasadena.

The movement is growing, labor leaders said, covering more workers affected by the pandemic. Coachella has already passed an ordinance giving hazard pay to farmworkers, the first in the nation to do so.

Companies boosted grocery workers’ pay at the peak of the pandemic last year. But most – with the exception of companies such as Save Mart and Trader Joe’s – had ended the practice by June, according to a report from the Brookings Institution.

Long Beach was the first to pass an ordinance, giving workers at large grocery stores an extra $4 per hour for at least 120 days. In response, the California Grocers Association filed a federal lawsuit saying such ordinances are unconstitutional, and Kroger closed two grocery stores in the city.

Though Sacramento has been the site of protests calling for higher wages and better safety conditions for workers, neither the county Board of Supervisors nor City Council has proposed hazard pay ordinances. But the policy has spread to nearly a dozen cities in Southern California and several more in Northern California.

Fresno so far is the only city in Central California to consider hazard pay, but Fresno City Council President Luis Chavez said he has gotten calls from officials in surrounding cities. Chavez has proposed extra pay of $3 an hour for 120 days for the city’s grocery workers.

Many businesses have come out against hazard pay, saying the policy will only lead to more closures and layoffs.

For unionized grocery workers, it should be collective bargaining agreements, not city ordinances, that decide their wages, said Ron Fong, president and CEO of the California Grocers Association.

Other workers are pushing for hazard pay as well.

Coachella in February approved “hero” pay for farmworkers and workers at grocery stores, pharmacy stores and restaurants. Only those who employ 300 or more workers nationally and more than five employees in the city would need to provide hazard pay.

Large fast-food chain restaurants have stayed open during the pandemic, with employees going to work every day, said Megan Beaman-Jacinto, a Coachella councilwoman and workers’ rights attorney. She also pushed to include farmworkers, saying they have often been excluded from the protections provided by labor laws.

Healthcare workers are also pushing for extra pay, through a bill introduced by Assemblyman Al Muratsuchi, D-Torrance.

Assembly Bill 650 would require private health care companies to provide a $10,000 bonus to a non-executive employee who is working during the pandemic and staying in the industry through 2022. Part-time employees would get up to $6,000.

SEIU Local 2015, which represents 400,000 long-term caregivers, is also calling for hazard pay as part of its campaign promoting mass vaccination and calling on local officials to improve working condition for the union’s members.

Workers could also get some help from the coronavirus relief package that President Joe Biden signed March 11. A provision in the bill allows states to give “premium pay” of up to $13 per hour on top of their typical wages to employees deemed essential. The money would come out of the $26 billion the law allocates to California state government.

27 States Suddenly Show Uptick in New COVID Infections

New cases of Covid-19 are once again on the rise across more than half of the United States as officials race to vaccinate additional people before highly contagious variants become prevalent in the country.

As of Sunday, the seven-day average of new cases rose by 5% or more in 27 states, according to a CNBC analysis of data compiled by Johns Hopkins University. Across the U.S., the nation logged an average of 54,308 new cases per day over the past week – a 1% rise from the prior week after months of rapidly declining case numbers, according to the data.

Even as the U.S. picks up the pace of vaccinations, giving about 2.5 million shots every day, some health officials have warned the country remains in a precarious spot. The lifting of restrictions in many states and the spread of more contagious variants in the U.S. threaten to undo the nation’s progress, which has seen cases, hospitalizations and deaths all fall dramatically since the peak earlier this year.

Lifting restrictions is a “serious threat to the progress we have made,” Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, told reporters at a news briefing Monday. Walensky said she’s worried about an unavoidable surge in cases. “We are at a critical point in this pandemic, a fork in the road.”

Daily new deaths continue to fall, likely helped by the prioritization for vaccination of the elderly and those with comorbid conditions who are most likely to die of Covid-19. About 68.8% of those 65 and older have received at least one shot of a vaccine as of Sunday, according to the CDC. In total, more than 124.4 million doses have been administered, but most of those are for two-dose vaccines.

As optimism around the steady rise in vaccinations picks up, many states have begun to ease restrictions on businesses and gatherings, despite warnings from the CDC not to do so. Though some states, such as New Jersey, are beginning to consider holding off on further reopening as cases begin to rise.

White House Chief Medical Advisor Dr. Anthony Fauci urged states last week not to declare victory prematurely. Fauci said he was concerned about a number of states and cities that were pulling back on public health measures and dropping mask mandates.

Adding to the urgency of the need to get people vaccinated quickly is the looming threat of new variants, which appear to have already caused severe surges across much of Europe and other parts of the world. The CDC has projected that the more contagious and potentially more deadly B.1.1.7 variant, which was discovered in the United Kingdom, could become the dominant strain in the U.S. by the end of the month.

Some health officials have said that the B.1.1.7 variant could be what’s behind some particularly worrying surges seen in various states, including Michigan, where cases have risen dramatically in recent days. According to data from Johns Hopkins, Michigan is reporting an average of almost 3,000 new cases per day, up by about 50% from a week ago.

California/Washington Disclose as Oregon Hides EDD Fraud

According to a report in the Associated Press, Oregon officials continue to refuse to publicly disclose how much money the state has lost to unemployment insurance fraud during the pandemic, despite the fact that neighboring states Washington and California have reported huge sums of money wrongly paid after their systems were targeted by sophisticated hackers.

The Oregon Employment Department says it is not “comfortable” disclosing the information because it could provide criminals an opening to exploit their systems further.

“Although some other states have shared fraud-related data, the Oregon Employment Department is not sharing any dollar amounts – including broad estimates – for how much we have identified as fraud, or breakdowns of other numbers,” said Melanni Rosales, the communications director for the department.

Nationwide fraud has overwhelmed state unemployment agencies and antiquated benefit systems that are easy targets for persistent criminals. It has delayed legitimate payments and turned thousands of Americans into victims of identity theft. A review by The Associated Press found that many states have failed to adequately safeguard their systems.

California has been the biggest target, having distributed an estimated $11 billion in fraudulent payments and an additional $19 billion in suspect accounts. Other estimates, according to AP’s reporting across the states, range from several hundred thousand dollars in smaller states such as Alaska and Wyoming to $6.5 million in Colorado and to hundreds of millions in more populous states such as Massachusetts and Ohio.

Washington state was among the first hit with fraudulent unemployment claims believed to be tied to a West African scam ring using identities stolen in prior data breaches, such as the massive 2017 Equifax breach. More than 122,000 fraudulent claims made in the state siphoned $600 million. As of January, Washington was able to recover $357 million.

While officials from the Oregon Employment Department say the state is not facing the same scale of fraudulent claims as seen in Washington or California, in terms of dollar amounts or percentage, they refuse to disclose how much the state has lost, details about ongoing fraud prevention tactics, investigations, or the scope of potentially fraudulent activity.

Gov. Kate Brown agrees with the decision not to release the information, saying that the goal is to preserve the integrity of the unemployment insurance system and trust fund.

“This means, we must use every tool available to us to help prevent and combat fraud,” said Liz Merah, the governor’s press secretary. “At this point, we are not willing to jeopardize this foothold by disclosing information that would make it easier for bad actors to game the system.”

Bay Area Pair Indicted for $300M uBiome Healthcare Fraud

A federal grand jury handed down a 33-page indictment charging 36 year old Zachary Schulz Apte and 46 year old Jessica Sunshine Richman with multiple federal crimes including conspiracy to commit securities fraud, conspiracy to commit health care fraud, money laundering, and related offenses in connection with alleged schemes to defraud health insurance providers and investors.

According to the indictment, Apte and Richman, both of whom resided in San Francisco at the time, co-founded uBiome in October 2012. Initially, uBiome offered a direct-to-consumer service, called “Gut Explorer,” which allowed an individual to submit a fecal sample that uBiome would analyze in its laboratory and produce a report comparing the customer’s microbiome to the microbiomes of others who had submitted fecal samples to uBiome, all for less than $100.

The defendants eventually expanded uBiome’s business model to include development and marketing of “clinical” tests regarding the gut and vaginal microbiomes, which tests would ostensibly be used by medical professionals to make medical decisions and as to which uBiome would seek reimbursement from health insurance providers in amounts up to nearly $3,000. Apte’s and Richman’s efforts to have uBiome develop clinical tests that could be billed to insurance companies were intended to attract large-scale venture capital investment.

By late 2015, shortly before it raised millions of dollars in its “Series B” fundraising round, uBiome began to market a “clinical” version of a test.

Thereafter, the indictment alleges that Apte and Richman caused uBiome to employ various methods to secure health care provider orders for its clinical gut test and clinical vaginal test, including by having its Chief Medical Officer review test requests from customers and endeavoring to build a network of health care providers external to uBiome.

The defendants ultimately adopted several fraudulent practices with respect to its clinical tests. Specifically, the defendants developed, implemented, and oversaw practices designed to deceive approving health care providers and reimbursing insurance providers regarding tests that were not validated and not medically necessary.  The defendants falsified documents and lied about and concealed material facts when insurance providers asked questions to which truthful answers would reveal the fraudulent nature of uBiome’s billing model.

Such practices included fraudulently submitting reimbursement claims for re-tests or re-sequencings of archived samples (referred to internally at uBiome as “upgrades”) and utilizing a captive network of doctors and other health care providers who fraudulently were given partial and misleading information about the test requests they were reviewing. They are also accused of  fraudulently submitting reimbursement claims with respect to tests that had not been validated under applicable federal standards and/or for which patient test results had not yet been released.

Between 2015 and 2019, uBiome submitted more than $300 million in reimbursement claims to private and public health insurers. Of these reimbursement claims, uBiome was paid more than $35 million.

San Jose Physician Indicted for Illegally Prescribing Opiates

Donald Siao M.D. faces federal charges that he illegally distributed hydrocodone and oxycodone pills in his medical practice and committed health care fraud.

Siao, 55, of San Jose, is a medical doctor licensed by the state of California who conducted his practice in San Jose. His license authorized him to write prescriptions for Schedule II through V controlled substances for medical care.

A prescription monitoring system identified Siao was a high prescriber, exemplified by a recent year when Siao wrote 8,201 prescriptions for controlled substances, including large quantities of hydrocodone and oxycodone and many instances of the dangerous combination of opioid, muscle relaxant, and benzodiazepine known in the drug world as “the holy trinity.”

Undercover law enforcement agents posed as new patients and met with Siao at his medical practice.

During initial visits, the agents complained of pain in vague or general terms. Siao conducted little or no physical examinations. The initial and subsequent visits usually lasted approximately two minutes. In initial visits Siao prescribed hydrocodone or oxycodone, and in follow-up appointments Siao continued to prescribe the same medicine and increased the amounts.

In one example in the complaint, an uncover agent posing as a patient met with Siao at an initial appointment and complained of pain. Following an eight second physical examination, Siao wrote a prescription for 30 pills of Norco, a hydrocodone-acetaminophen combination.

In subsequent visits as short as 2 minutes and 10 seconds, the undercover agent requested larger prescriptions for reasons that included he had given away pills to his employees as work incentives and that he had ran out of pills when he went to a concert. Siao increased the size of the prescriptions, eventually writing a prescription for 90 Norco pills at his last visit.

In another example in the complaint, an undercover agent requested and received a larger prescription of Norco so he could pay back friends with the pills. The agent then requested a prescription for Marinol, explaining he would not take the Marinol but rather would display the prescription at work as a pretext for his positive drug tests, saying “that way it covers the dirty drug test.” Siao replied “gotcha” and wrote the prescription.

The complaint also charges Siao with health care fraud and alleges that on May 9, 2018, he wrote alprazolam and oxycodone prescriptions for a patient without any legitimate medical purpose.

CHSWC Releases 2020 Annual Report

The Commission on Health and Safety and Workers’ Compensation (CHSWC) examines the health and safety and workers’ compensation systems in California and makes recommendations to improve their operation. CHSWC is composed of eight members appointed by the Governor, Senate and Assembly to represent employers and labor.

At the request of the Executive Branch, the Legislature and the Commission, CHSWC conducts research, releases public reports, presents findings, and provides information on the health and safety and workers’ compensation systems. They have just released the 247 page 2020 Annual Report.

Some of the highlights of the many topics covered in the Report include:

The Return-to-Work Supplemental Program administers a $120 million fund that makes supplemental payments to workers whose permanent disability benefits are disproportionately low in comparison to their earnings losses. A recent CHSWC study by RAND that evaluated the Return-to-Work Fund found a low rate of receipt of the RTWSP among eligible workers. CHSWC made a number of recommendations including increasing outreach and notification to help increase participation.

Research on the impact of the 2012 workers’ compensation reforms on earnings losses suggests that SB 863 has likely met its primary objective of restoring adequate wage replacement rates, although some inequities still exist in these rates across impairments.

The DWC recently adopted changes in its Physician Services/Non-Physician Practitioner Services Fee Schedule to encourage greater use of telehealth in light of the COVID-19 public health emergency. The Commission recommended that administrators monitor and study the use of telehealth and other medical care changes in WC in light of the COVID-19 pandemic.

In recent years, criminal indictments and prosecutions have highlighted the extent of medical provider fraud in the WC system. Estimates of the cost of this fraud to participants in the WC system are as high as $1 billion per year. They as that officials consider recommendations in the RAND report “Provider Fraud in California Workers’ Compensation” related to provider fraud.

A CHSWC study found that between $15 billion and $68 billion in payroll is underreported annually. A related study on split class codes found that 25 to 30 percent of low-wage payroll is underreported or misreported.

SB 1159 (2020) would require the Commission on Health and Safety and Workers’ Compensation to conduct a study of the impacts of COVID-19 and the specific presumptions created by this bill and report its findings to the Legislature and the Governor.

SB 1159 provides that a preliminary report from CHSWC is due to the Legislature and the Governor by December 31, 2021, and the final report must be delivered by April 30, 2022.

Congress Proposes Solution for Unemployment Insurance Fraud

The massive Unemployment Insurance fraud during the pandemic, including the estimated $11 billion loss by the California Employment Development Department has apparently triggered federal legislators to act. This month they introduced the Unemployment Insurance Technology Modernization Act to help solve the problem.

One of the bill sponsors, Congressman Steven Horsford (Nevada) provided the following rationale.

State unemployment insurance systems have been neglected for decades, with many running on technology from the 1960s. The consequence of these broken systems has been millions of jobless workers waiting months to receive their benefits, and struggling to keep a roof over their heads and put food on the table. These outdated systems are also susceptible to attacks from organized criminal networks that have stolen billions of taxpayer dollars from the program. It is clear that an upgrade is long overdue.”

Rather than invest in 53 state systems, the Unemployment Insurance Technology Modernization Act would invest in federal technology capabilities all states could use to administer their unique unemployment insurance programs. Not only will this approach ensure that all states have access to modern, state-of-the-art technology, but investing in a single set of technology capabilities is far more cost-effective than building 53 separate systems.”

Specifically, the Unemployment Insurance Technology Modernization Act:

– – Requires the U.S. Department of Labor to work with technology experts to develop, operate, and maintain a modular set of technology capabilities to modernize unemployment compensation technology.
– – States will be able to use all of the capabilities or choose to use only those capabilities that meet their needs.
– – The updated technology will help states ensure timely and accurate delivery of payments and better identify fraudulent claims.
– – Prioritizes user experience, including by requiring consultation and testing with claimants, employers, State workforce agency staff, and other users.
– – Requires a study to evaluate unemployment insurance technology needs, with an emphasis on program accessibility and equity.
– – Establishes a new Department of Labor Digital Services Team to expand the Department’s ability to assist states with technological issues.
– – Ensures the use of best practices in cybersecurity, procurement, and transparency during and after the development of the technology capabilities.
– – Includes accessibility requirements for online claim-filing systems.
– – Ensures that the new technology capabilities do not rely on automated decision systems that may produce biased results without impact assessments and public input.

According to the language of the proposed Act “Not later than 2 years after the date of enactment of this section, the Secretary shall develop, operate, and maintain a modular set of technology capabilities to modernize the delivery of unemployment compensation.”

Two Counties Sue For Worker Misclassification

Two California district attorneys are teaming up to sue a home cleaning and repair gig company for allegedly misclassifying tens of thousands of workers as independent contractors.

The district attorneys of San Francisco and Los Angeles on Wednesday sued the New York-based company Handy, which operates an online application that allows customers to schedule home-cleaning and repair services.

Handy, a company started by Harvard Business School classmates Oisin Hanrahan and Umang Dua in 2012, has scheduled home-cleaning and repair gigs for tens of thousands of workers in California, according to the San Francisco DA’s office.

The lawsuit filed in San Francisco Superior Court accuses Handy of failing to pay minimum wage and overtime wages or reimburse job-related expenses such as cleaning supplies. It also claims the company denied workers sick leave and did not pay unemployment insurance or payroll taxes.

It further accuses the company of illegally imposing fines on workers and deducting pay from their wages. Additionally, it claims the company did not cover quarterly healthcare expenditures for workers in San Francisco as required by a city ordinance.

In an emailed statement, a Handy spokesperson said the lawsuit “has no merit” and is based on a “fundamental misunderstanding” of California law and the rights of Handy and its workers, which it calls “pros.”

“Handy complies with all laws and regulations in California and elsewhere, and we will vigorously defend ourselves in court,” the spokesperson said.

Assistant San Francisco DA Scott Stillman, who runs the office’s Economic Crimes Unit, said Handy cannot satisfy the three requirements necessary to classify workers as independent contractors under state law.

The California Supreme Court established a three-pronged standard, known as the “ABC test,” for determining a worker’s employment status in its 2018 ruling in Dynamex v. Superior Court. That standard was later written into state law with the passage of Assembly Bill 5 in 2019.

Stillman said Handy directly controls workers by monitoring them through an app for several hours before and after their scheduled shifts. The company allegedly fines workers if they show up to assignments late or leave early. Stillman argued that Handy’s gig workers also support the company’s core business function – providing home-cleaning and repair services.

Handy also requires its workers to sign arbitration agreements waiving their right to sue the company in court. Labor disputes, including ones involving employment status, must be resolved through a private arbitration process instead.

The district attorneys seek a court order requiring Handy to classify workers as employees, pay civil penalties and provide restitution to workers for unpaid wages and job expense reimbursement.

Last year, voters approved a ballot measure backed by Uber and Lyft that exempted app-based transportation and delivery workers from California’s labor law, allowing those companies to continue classifying their workers as independent contractors.

DEA Schedules 20th Drug Take Back Day for April 24

With opioid overdose deaths increasing during the pandemic, the Drug Enforcement Administration announced its 20th Take Back Day scheduled for April 24.

At its last Take Back Day in October, DEA collected a record-high amount of expired, unused prescription medications, with the public turning in close to 500 tons of unwanted drugs.

Over the 10-year span of Take Back Day, DEA has brought in more than 6,800 tons of prescription drugs. With studies indicating a majority of abused prescription drugs come from family and friends, including from home medicine cabinets, clearing out unused medicine is essential.

According to the Centers for Disease Control and Prevention, the U.S. has seen an increase in overdose deaths during the COVID-19 pandemic, with 83,544 Americans overdosing during the 12-month period ending July 1, 2020, the most ever recorded in a 12-month period. The increase in drug overdose deaths appeared to begin prior to the COVID-19 health emergency, but accelerated significantly during the first months of the pandemic.

The public can drop off potentially dangerous prescription medications at collection sites which will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement.

DEA and its partners will collect tablets, capsules, patches, and other solid forms of prescription drugs. Liquids (including intravenous solutions), syringes and other sharps, and illegal drugs will not be accepted. DEA will continue to accept vaping devices and cartridges at its drop off locations provided lithium batteries are removed.

Helping people dispose of potentially harmful prescription drugs is just one way DEA is working to reduce addiction and stem overdose deaths.

Learn more about the event at, or by calling 800-882-9539.

Exclusive Remedy Dues Not Require Actual Receipt of Benefits

Juan Castro sustained injuries when he fell out of a tree he was trimming at an apartment complex owned by Kirby Manor Corporation and managed by Hallmark Realty.

Kirby and Hallmark had an agreement that identified Hallmark as both an independent contractor hired by Kirby and Kirby’s agent. Hallmark had hired Marcos Patino to provide landscaping services, including tree-trimming, and Patino, in turn, had hired Castro to help him trim the trees.

Castro filed this negligence action against Kirby and Hallmark. He alleged that he was an employee of the defendants, that he sustained his injuries in the course of his employment, and that during his employment the defendants “failed to secure any worker’s compensation insurance coverage whatsoever to cover any workplace injuries suffered by” him. Castro alleged the defendants’ failure to obtain a worker’s compensation policy entitled him to bring a civil action for negligence under Labor Code section 3706.

Hallmark and Kirby filed a motion for summary judgment. Hallmark conceded Castro was its employee, but contended that it had workers’ compensation insurance when he suffered his injury and that therefore Castro’s exclusive remedy was through the workers’ compensation system. Hallmark submitted a true and correct copy of Hallmark’s workers’ compensation insurance policy in effect at the time of Castro’s accident.

Castro argued, even assuming “there was a valid workers’ compensation policy,” Hallmark had not produced evidence Castro “met the minimum number of hours required to qualify for workers’ compensation coverage.”

The trial court granted the motion for summary judgment, and the Court of Appeal affirmed in the unpublished case of Castro v. Knowlton Manners Apartments.

The Exclusive Remedy rule ordinarily protects an employer from suits by an employee for injuries during the course of employment.

One exception to that rule appears in section 3706, which provides that an injured employee may bring a civil action for damages against “any employer [who] fails to secure the payment of compensation” under the Act, as required by section 3700. An employer complies with its obligation under section 3700 to secure the payment of compensation by either purchasing workers’ compensation insurance or self-insuring.

In a statutory action under section 3706 of the Labor Code, it is the ‘plaintiff’s obligation to plead and prove violation of section 3700 by his employer’s failure to carry workers’ compensation insurance.

The Court noted that “Castro cites several cases he suggests “indicate that a defendant must show a plaintiff received workers’ compensation benefits for the claimed injuries, before a plaintiff can be barred from pursuing a damages action for the same injuries.” None of those cases, however, says anything like that.”